Norway bioplastic maker enters joint venture in Thailand

By: Steve Toloken

January 25, 2013

BANGKOK -- Norwegian bioplastics maker BioBag International AS and Thailand's Thantawan Industry Public Co. Ltd. are setting up a partnership to manufacture BioBag products in Thailand, which will be the Scandinavian company's first production base in Asia.

Initially the cooperation will focus on exports to North America, but the two companies hope to do joint market development in Thailand and Southeast Asia, where local demand is still in its infancy, said Peter Lofvenholm, project sales manager for Askim, Norway-based BioBag.

"It's a partner agreement, meaning that we are giving them volumes and they are giving us production capacity," said Lofvenholm in an interview at the Inno Bioplast 2013 conference, held Jan. 24-26 in Bangkok. "Instead of building that capacity ourselves, we went to a very good supplier."

Lofvenholm said the agreement will start with manufacturing products such as carrier bags and sandwich bags. He disclosed the partnership in a speech at Inno Bioplast.

In a follow-up interview, he said the company chose Thailand for its first Asian production because the country is developing quickly as a bioplastics manufacturing location, and companies there are familiar with technical standards for biodegradability and compostability in North America, Europe and other major markets.

"There's a lot of movement in the bioplastics market here," he said. "There are no issues and confusion. They are familiar with certifications. They have all the groundwork. … You see their factory, and the quality systems are very, very good."

BioBag makes compostable plastic bags and film for household food-waste composting and agricultural uses, along with biodegradable carrier bags and retail packaging, all using Novamont SpA's Mater-Bi material.

The company switched entirely to bioplastic in 2003, stopping any work in petrochemical-based plastics, and set up manufacturing partnerships with four companies between 2005 and 2010, giving it production in Norway, Belgium, Portugal and the U.S. Thantawan is its fifth such partnership.

Bangkok-based Thantawan has more than 1,000 employees at factories in the country and makes a range of packaging products. Less than 20 percent of its sales are in biodegradable or bio-based packaging.

In an interview at Inno Bioplast, Thantawan Chairman Phietoon Trivijitkaserm said the partnership could expand to joint investment later. "BioBag is now just starting. We have a very good future because we are very keen in food packaging products," he said.

Lofvenholm said the two companies hope to formally sign their agreement soon.

Beyond manufacturing, Lofvenholm said the two companies want to work together on market development, although he said there "is no market in this region yet."

"That's the other feature … they are also our marketing partner in Thailand," he said. "We're trying to develop some things together. You might see some products from us in high-end shops."

For larger-scale use of biodegradable food packaging, Thailand will need to build more composting infrastructure, Trivijitkaserm said.